1. An increase in which one of these will decrease the value of a call option and increase the value of a put option?
Stock price
Time to expiration
Stock volatility
Interest rate
Exercise price
2. A firm has a market value equal to its book value. Currently, the firm has excess cash of $300 and other assets of $6,200. Equity is worth $5,000. The firm has 500 shares of stock outstanding and net income of $720. What will the new earnings per share be if the firm uses its excess cash to complete a stock repurchase?
$1.44
$.94
$.86
$1.53
$1.71